Novartis AG (NYSE: NVS) held its Q2 2026 earnings call on July 21, 2026, during which executives detailed the company's first FDA submission for an antibody-oligonucleotide conjugate and positive biomarker data supporting a potential accelerated filing pathway in facioscapulohumeral muscular dystrophy. Management also flagged a dense slate of second-half readouts across cardiovascular, immunology, and neuromuscular programs, with CEO Vasant Narasimhan indicating that positive results could raise the company's mid- to long-term growth outlook.
Novartis reported second-quarter net sales growth of 1% in constant currencies to USD 14.4 billion, with core operating income flat at USD 5.9 billion, as growth from priority brands offset generic erosion tied to Entresto's patent expiry. The company reaffirmed full-year 2026 guidance for low single-digit net sales growth, with management noting that second-half growth should accelerate to mid-single digits as the year-over-year Entresto comparison eases.
Management also maintained guidance for a low single-digit decline in full-year core operating income. Novartis noted that Q2 benefited from temporary inventory and R&D phasing effects that added about one percentage point to sales growth and five percentage points to core operating income growth, with those effects expected to reverse in H2.
Key Strategic Signals
Del-zota FDA submission marks a platform milestone for antibody-oligonucleotide conjugates. Novartis submitted its first-ever FDA filing for the therapeutic use of an antibody-oligo conjugate, seeking accelerated approval for del-zota (delpacibart zotadirsen; formerly AOC 1044) in Duchenne muscular dystrophy patients amenable to exon 44 skipping, using dystrophin as a surrogate biomarker. The submission, which follows breakthrough therapy designation and data from the EXPLORE44 study, positions Novartis to launch its first AOC-based therapy in the first half of 2027, with additional exon-targeting programs in development for other DMD subtypes.
Del-brax biomarker data in FSHD met primary and secondary endpoints, opening a potential path to earlier filing. The Phase I/II study at the target Phase III dose showed statistically significant reductions in creatine kinase alongside favorable changes in KHDC1L, a protein downstream of the DUX4 gene implicated in facioscapulohumeral muscular dystrophy. Narasimhan said the company plans to engage FDA and other regulators in the coming months to explore whether biomarker data could support an earlier submission for delpacibart braxlosiran (AOC 1020) than the 2028 base case, though he cautioned that "we can't guarantee that we will win the case."
Pluvicto's next growth phase hinges on an expected Q3 2026 approval in hormone-sensitive prostate cancer. Management said the HSPC indication would expand the eligible patient pool by 75%, with roughly two-thirds of the addressable population already treated by healthcare providers with established Pluvicto referral patterns. Narasimhan also pointed to earlier-stage radioligand therapy work in GRPR-targeted agents for neuroendocrine tumors and an Actinium-based PSMA compound being studied across multiple prostate cancer settings, signaling continued lifecycle investment beyond the current Pluvicto and Lutathera franchise.
Ianalumab and remibrutinib (Rhapsido) readouts cluster in the second half, with management framing both as having multi-indication, multi-blockbuster potential. Ianalumab is on track for a US launch in Sjögren's disease in the second half of 2026, alongside a first-line ITP readout, while Rhapsido awaits FDA action in chronic inducible urticaria and continues gradual access expansion in chronic spontaneous urticaria. Narasimhan said the company is deliberately pacing the reimbursement approach for remibrutinib "given the multiple indications we hope to secure... over time," rather than pushing for a rapid inflection in paid prescriptions.
Analyst Pressure Points
- Pelacarsen’s statistical powering and background therapy confounders drew repeated scrutiny. Analysts questioned whether use of GLP-1, SGLT2 and PCSK9 therapies could dilute the cardiovascular benefit observed in the HORIZON trial, and whether a mid-teens reduction in cardiovascular risk would be considered clinically meaningful. The study was formally powered to detect reductions of 20% and 25% in populations above specified baseline Lp(a) thresholds. Narasimhan said incretin-based therapy use was approximately 6%, while PCSK9 use had risen only modestly from an 11% baseline. He added that a mid-teens benefit would still constitute a clinically meaningful “win,” given the absence of approved treatments specifically targeting elevated Lp(a).
- Remibrutinib's ability to improve on Aubagio's relapse rate and match antibody-based therapies on disability progression was questioned given the absence of Phase II data. UBS and Citigroup analysts noted that fenebrutinib, a competing BTK inhibitor, failed to demonstrate a statistically significant effect on disability progression in its Phase III program. Narasimhan said Novartis believes remibrutinib is more potent and selective on target, but acknowledged "there's no way for us to assess that in any sort of objective way at this point until the study reads out."
Forward-Looking Catalysts
- Pelacarsen Phase III cardiovascular outcomes data, expected in the coming months, will test whether Lp(a) lowering translates into a clinically meaningful reduction in major adverse cardiovascular events; management indicated any approval would leverage the existing Leqvio (inclisiran) sales infrastructure, minimizing incremental commercial investment.
- Remibrutinib's Phase III multiple sclerosis readout, benchmarked informally against Aubagio's roughly 0.1 annualized relapse rate, will determine whether the BTK inhibitor can also demonstrate an effect on disability progression—a differentiator that could position it either ahead of or behind B-cell-depleting antibody therapies in treatment sequencing.
- Abelacimab’s interim analysis, expected before year-end after 75% of the required events, will provide an important test of whether Factor XI inhibition can deliver effective anticoagulation without increasing bleeding risk in patients considered ineligible for non-vitamin K antagonist oral anticoagulants. If the analysis does not meet the prespecified stopping criteria, the study will continue to its full event count, with completion expected in 2028.
Beyond the late-stage catalysts, Narasimhan reiterated that Novartis' business development approach remains unchanged, favoring bolt-on deals typically under USD 2 billion in upfront payments, with selective larger transactions—such as the Avidity acquisition that produced del-zota and del-brax—reserved for assets fitting either the company's platform or therapeutic-area strategy. He noted that asset valuations for programs with limited or no clinical data have risen substantially across the sector, requiring higher conviction in scientific differentiation before committing capital.
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